Oil industry eager to take case to public

Houston ChronicleMidland Reporter-Telegram

Published 7:00 pm, Saturday, May 16, 2009

Call goes out to defend energy producers amid policy changes

By Brett Clanton

Houston Chronicle

Facing unwelcome changes to U.S. energy policy, some oil and gas industry leaders are calling for stepped-up efforts to defend the business publicly and dispel what they view as myths about the potential of renewables to meet the nation's energy needs.

"In my 30 years in the industry, I don't think there has been a greater call for engagement," said Gary Luquette, president of Chevron Corp.'s North American exploration and production business. At last week's Offshore Technology Conference in Houston, he stressed the need for greater communication on energy issues with the American public and even with industry critics.

"There's no reason for us to be fighting off our back foot," he said.

The call to action comes as the Obama administration is formulating plans that support greater investment in alternatives, reduction of greenhouse gas emissions, repeal of certain tax benefits and other initiatives that could have a major effect on the industry.

Some in the industry argue the plans are unrealistic and would be a step backward in efforts to reduce U.S. dependence on foreign oil, since they would burden the industry with additional costs and hinder investment in developing new resources.

They say there is more urgency now than ever to educate Americans on what industry leaders view as a hard reality: that fossil fuels will provide most of the world's energy in coming decades even as alternatives gain ground.

"I'm convinced that American people are smart and pragmatic, and if they hear the whole story about oil and gas, coal, nuclear, which is our base line energy, and not the myths, then they will be far more supportive of what the nation needs in the future," said John Hofmeister, former president of Shell Oil Co. and now head of the non-profit Citizens for Affordable Energy.

But industry critics are suspicious. They say despite rhetoric supporting all forms of energy, including renewables, the industry is chiefly interested in maintaining the status quo.

"They're spending more time on PR than they are actually trying to be part of the clean energy future," said Julia Bovey, spokeswoman for the Natural Resources Defense Council, a leading environmental group in Washington.

"They clearly want to get the message out that there is a lot of oil and gas, and they want to be able to get it," she said.

In recent years, the oil and gas industry has tried to improve its image - as well as counter backlash over record profits - with advertising stressing its contribution to the economy and national security portraying itself as high-tech and environmentally sensitive. It has also touted investments in wind power, biofuels and other alternatives.

Stepped-up efforts

The industry boosted those efforts last summer, when public support surged for expanding offshore drilling into federally protected waters as the price of oil reached nearly $150 a barrel and gasoline touched $4 a gallon.

"Four-dollar gas focused the public's attention like never before on the energy question," said Jack Gerard, CEO of the American Petroleum Institute, a Washington trade group that runs ads supporting the industry.

The group said that in a addition to energy education efforts on its Web site, blogs and social networking sites, it was launching a mobile phone outreach program that will send subscribers text messages with industry news.

But with energy prices lower and new leadership in Washington, the industry is grasping to deal with policy changes that will likely reshape the business in coming years.

"We feel like now what we're seeing is a little bit of panic by these companies," Bovey said.

The industry, however, contends that the energy debate has been presented falsely as an either-or proposition between fossil fuels and renewables.

Industry advocates say, for instance, that policymakers can open more federal waters to offshore drilling, which would boost domestic energy supplies, while at the same time supporting alternatives, many of which still are not commercially viable.

Some industry leaders also advocate a phased-in approach to reducing carbon emissions from refineries, cars and other polluters rather than imposing cuts all at once, which they say would be too costly.

Tone of debate a concern

Oil and gas officials at the Offshore Technology Conference acknowledged the urgency in getting in front of major policy issues facing the industry, but some expressed concern at the debate's rancorous tone.

"I think the rhetoric is really seriously getting in the way of progress," Marvin Odum, president of Shell Oil, said during a panel discussion at the event.

To move forward, Chevron's Luquette called for a new "engagement model" that seeks greater communication and collaboration with opposing groups.

Jason Grumet, executive director of the National Commission on Energy Policy, said he has had some success doing just that through his bipartisan group that was formed to find consensus on energy issues. But he said the task remains a challenge for a topic as complex as energy.

"It's too easy to see the vision and think you can get there Thursday," he said.